Article 10 of 968
The Music / Court ruling against Napster could shut service
Rita Ciolli. STAFF WRITER
(Copyright Newsday Inc., 2001)
Napster vowed to let the band play on yesterday despite a
federal appeals court ruling that said the company could be
liable for enormous monetary damages if it continues to let
Internet users download copyrighted music for free.
In rejecting almost all of Napster's legal defenses, a
panel of three judges on the Ninth U.S. Circuit Court of
Appeals in San Francisco yesterday found that Napster's
service "knowingly encourages and assists" millions of people
in violating the law.
The judges agreed with the record industry's arguments that
the existence of Napster cuts into sales of CDs to college
students and also harms the recording companies' own efforts
to distribute music online.
"This is a clear victory," said Hilary Rosen, president of
the Recording Industry Association of America, a trade group.
However, the judges did not restore an earlier U.S.
District Court injunction ordering the company to eliminate
all copyrighted music from its system. Instead, the appeals
court sent the case back to the lower court, saying that
record companies have the obligation to first notify Napster
specifically about which music is being illegally copied.
"Napster, however, also bears the burden of policing the
system..." wrote Chief Judge Robert Beezer. If Napster refuses
to take action, the District Court could then reissue the
injunction, which would essentially put Napster out of
"Napster is not shut down, but under this decision it could
be," the company said in a statement. "We will pursue every
avenue in the courts and the Congress to keep Napster
Napster users, which the company estimates to be about
10,000 per second at peak times, can download digital copies
of thousands of commercially released albums and songs without
paying for them. Napster argues that it is not causing any
economic harm to the recording industry, only allowing music
fans to sample music before deciding to purchase it.
This clash of business, culture and free speech was
unleashed in 1999 by Shawn Fanning, then an 18-year-old
college student who wrote the source code for the program that
allows computers to share files. He called it Napster, the
high school nickname he got because of the texture of his
The Napster case is the first big battle over how copyright
law should be applied in cyberspace, and its ultimate outcome
is likely to shape how music, movies, art and books will be
But both sides realize that public opinion about whether
the same rules should apply to the Internet is just as
important as the court decisions. "Our hope is that when this
decision gets read and talked about, the people who would be
inclined to do the same thing now won't do it," said Leon
Gold, a Manhattan trial lawyer that represented one of the
Even if Napster is stopped, it may already be too late to
change the expectations that online music should be free, said
Nicholas Economides , a professor at New York
University's business school. "There will be a proliferation
of alternative programs and to shut them down the music
industry will have to start suing individual consumers, their
own customers," he said.
Also, a renegade company could set up a similar operation
overseas in a country that is not bound by U.S. copyright law.
"Given the nature of the Internet, even if it is stopped in
the U.S. it can survive someplace else," Economides
Some of the alternative programs, such as Gnutella and
FreeNet, which make it extremely difficult to identify users,
are expected to benefit if Napster is shut down. "I will
definitely just download entirely from Gnutella. I have
already used it in the past," said John DeKenipp, 18, a
Hofstra University freshman.
Napster lawyers said yesterday that they will appeal the
panel ruling to the full Ninth U.S. Circuit Court of Appeals.
"We look forward to getting more facts into the record," said
the company, contending that the court ruled with "an
incomplete record before it."
The legal jockeying means Napster could continue to operate
for weeks, if not months.
Meanwhile, the delay allows time for a negotiated
settlement with Universal, Sony, Warner and EMI, the companies
that are suing it.
Another plaintiff in the case, Bertlesmann, invested $50
million in Napster on Halloween, saying it would drop its
subsidiary BMG out of the case if Napster could convert itself
into a fee-based subscription service by early summer, which
Napster has agreed to do.